Business Ethics ch13

Under what legal doctrine does a firm bear legal responsibility for injuries caused by something it made or sold, whether or not it was negligent or breached a warranty? a. Strict liability. b. Product liability. c. Consumer liability. d. Supplier liability.

a. Strict liability.

A prime social responsibility of business is to safeguard consumers: a. While continuing to supply them with goods and services they want. b. While maintaining high profit margins. c. By supplying consumers with products at the lowest possible cost. d. By providing new technology.

a. While continuing to supply them with goods and services they want.

Under proposals to establish uniform federal standards for determining liability: a. Plaintiffs would be discouraged from proceeding to trial. b. Companies would not have to go through repeated trials on the same charges in different states. c. Judges rather than juries would determine the original amount of punitive damages. d. Consumers would have to prove that a manufacturer knew or should have known that a product design was defective.

b. Companies would not have to go through repeated trials on the same charges in different states.

Manufacturers making false or misleading claims about a competitor's product is: a. Illegal but ethical. b. Illegal and unethical. c. Legal but unethical. d. Legal and unethical.

b. Illegal and unethical.

One alternative to product liability lawsuits is called: a. Limited resolution. b. Punitive damages reform. c. Alternative dispute resolution. d. Consumerism.

c. Alternative dispute resolution.

A goal of the consumer movement is to make consumer power: a. Exceed the rights and powers of firms that sell goods and services. b. Exceed the rights and powers of the Food and Drug Administration. c. An effective counterbalance to the rights and powers of firms that sell goods and services. d. An effective counterbalance to the rights and powers of the Food and Drug Administration.

c. An effective counterbalance to the rights and powers of firms that sell goods and services.

The law requiring that toys and infant products be tested before sale is called the: a. Child Safety Act. b. Strong Product Safety Bill. c. Consumer Product Safety Improvement Act. d. Uniform Safety Testing Bill.

c. Consumer Product Safety Improvement Act.

In the United States, which of the following agencies enforces the laws prohibiting deceptive advertising? a. Congress. b. Consumer Product Safety Commission. c. Federal Trade Commission. d. Department of Justice.

c. Federal Trade Commission.

The main responsibility of the National Highway Traffic Safety Administration is to: a. Set a uniform national speed limit. b. Set airline safety standards. c. Set motor vehicle safety standards. d. Safeguard consumers from altered odometers.

c. Set motor vehicle safety standards.

The act that requires lenders to inform borrowers of the annual rate of interest to be charged, plus related fees and services charges is called: a. The Consumer Protection Act. b. The Product Safety Act. c. The Predatory Mortgage Act. d. The Truth in Lending Act.

d. The Truth in Lending Act.